By Adam Hejl
Publication Date: 2026-06-11 21:29:00
What happened?
Shares of enterprise software giant Oracle (NYSE:ORCL) fell 12.6% in mid-morning trading after the company reported results that beat on nearly every measure but announced an investment commitment that alarmed investors focused on free cash flow and dilution.
Fourth-quarter revenue rose 21% to $19.18 billion, cloud infrastructure (OCI) rose 93% to $5.8 billion, and remaining performance obligation backlog (contracted future revenue) rose 363% year-over-year to a record $638 billion. Non-GAAP EPS beat consensus of $1.96. Its first fiscal year 2027 forecast of 27%-29% revenue growth and $1.72-$1.76 EPS beat both analysts’ estimates.
The problem is the cost of providing the backlog. Oracle spent $55.7 billion in capital expenditures in fiscal 2026 (a 162% increase year-over-year, higher than its own guidance of $50 billion) and generated negative free cash flow of $23.7 billion despite operating cash flow of $32 billion. It subsequently announced investments of $70 billion for fiscal year 2027, as well as $20 billion to $25 billion in…
